Australia unexpectedly lost jobs for a second straight month in December, capping the nation’s worst year for employment in almost two decades and weakening the local currency as traders raised bets on interest-rate cuts.
Falling part-time employment stalled job growth last year, with total payrolls posting little change in the year through December, its worst annual performance since 1992. The unemployment rate held at 5.2 percent for a second straight month in December as full- and part-time positions combined posted the biggest drop since April.
“Domestic business conditions are tough,” said Savanth Sebastian, an economist at Commonwealth Bank of Australia, the nation’s largest lender. “Over the next few months, the ongoing uncertainty about the global environment is likely to ensure businesses remain cautious and as such hiring intentions will continue to be scaled back.”
Traders priced in an 88 percent chance Reserve Bank of Australia Governor Glenn Stevens next month will make a third consecutive rate reduction for the first time since 2008 as Europe’s sovereign-debt crisis weakens global trade and growth. Signs of weakening demand are emerging across the Asia-Pacific region, with New Zealand today recording an unexpected decline in consumer prices.
New Zealand consumer prices dropped 0.3 percent from the third quarter, when they advanced 0.4 percent, government data showed, giving the central bank scope to hold rates at a record- low. A separate report showed consumer confidence rose this month from December, with the index reading at the highest in a year.
Job Cuts
Australian data showed the number of people employed fell by 29,300 last month after a revised 7,500 drop in November, exceeding the median estimate in a Bloomberg News survey of 23 economists for a 10,000 increase.
The number of full-time jobs advanced by 24,500 in December, and part-time employment plunged by 53,700, today’s report showed. The participation rate, a measure of the working- age population, dropped to 65.2 percent in December, the lowest level since May 2010, from 65.5 percent a month earlier.
Australia’s dollar weakened, trading at $1.0393 at 3:34 p.m. in Sydney from $1.0423 before the release and $1.0437 yesterday in New York. Investors are pricing in 107 basis points of rate cuts over the next 12 months, up from 103 points, a Credit Suisse Group AG Index showed.
Leading indicators of Australian employment have been weaker as pessimism about the global economic outlook deepens.
Weaker Demand
A closely watched government measure of job vacancies dropped 3.3 percent in the three months to November, retracing all of the gains in the prior period.
Help-wanted notices fell in December for the fifth time in six months as the bout of global financial turmoil worsened, an Australia & New Zealand Banking Group Ltd. report released three days ago showed.
